Start an LLC in Arkansas

Last updated on: October 5, 2021

Are you dreaming of owning an LLC or Professional LLC in Arkansas but don’t know where to start yet?

In this DIY guide, we’ll briefly cover how to apply for LLC by highlighting a few key steps, such as drafting an operating agreement LLC or appointing a registered agent. We’ll also go over what forms and fees you’ll need to create an LLC in Arkansas and keep it in good standing.

Name an Arkansas LLC

When you are planning to start an LLC in Arkansas, the name is one of the first things that comes to mind. The name should be chosen responsibly since it can give the company a head start. It should be creative and concise to attract customers and keep them coming back. In addition, of course, you have to make sure that the chosen name complies with the law.

The requirements for Arkansas business name include the following main points:

  • The presence of words that uniquely describe your business:
  • “Limited Liability Company,” “L.L.C.” or “LLC”;

or

  • Professional Limited Liability Company, P.L.L.C., PLLC, P.L.C., or PLC.
  • Any allusions to the connection of the company with the state agencies are prohibited. No such words as “FBI”, “Treasury”, “State Department” etc. are allowed;
  • The name of an LLC may not include the name of a person who is not and has never been a member of the LLC;
  • The words “Bank,” “Attorney,” “University,” etc. require compliance with certain rules. In order to add them to the name, it is necessary to get permission and have a licensed person in the company’s staff;
  • The name must be available, different from other state-registered companies.

Check Name Availability

The name of each Arkansas LLC must be distinguishable in the records of the Secretary of State. This means that you have to come up with a name that is different from all the other state-registered companies. 

How can you check if the name is free? Fortunately, there’s a quick way. Just do a free search on the Arkansas Secretary of State business name database before you enter the name in the formation documents.

If the name you want is available, the next step may be a name reservation or filing an organization. However, if the name you have chosen is already in use, you should come up with a new one. Also, to increase uniqueness, it is acceptable to make substantial changes to the name, such as:

  • Using unique spellings;
  • Adding, removing, changing, or rearranging keywords;
  • Changing between singular, plural, and possessive forms of the same word;
  • Changing numerals (Arabic numerals, Roman numerals, or words).

Name Reservation

After checking availability, you can reserve your name in Arkansas to protect it from third parties. This will allow you to complete your formal registration without worry.

Reservations are valid for 120 days in Arkansas. Applications are accepted in 2 ways:

Online

Online filing is the best choice for those who appreciate the convenience and speed of digital documents. It’s also cheaper. You will need to pay just a mandatory $22.5 filing fee.

By Mail/In Person

If, for some reason, you can’t apply online, download the Application for Reservation of Entity Name to your computer, fill it out, and print it. Enclose a $25 check for the mandatory fee. It should be sent to:

Arkansas Secretary of State
Business and Commercial Services Division
Suite 250, Victory Building
1401 West Capitol Avenue
Little Rock, AR 72201

Name reservation is not a required step in starting a business. You can skip it and save some money if you’re ready to file your company documents with the state right away. Approval of Articles of Organization will automatically register the name listed on them for the LLC.

Apply for EIN in Arkansas

Once you register an LLC, you will need to think about applying for an Employer Identification Number. The EIN is a unique 9-digit code, which the IRS can use to quickly find your company records. 

Obtaining an EIN is not a mandatory step in forming an Arkansas LLC, but it is required for most businesses. Hiring employees, paying taxes in Arkansas and federally, and opening a business account are the main reasons why you need an EIN.

The good news is that getting an EIN in Arkansas is free. To do so, you should apply in one of the 3 ways below:

Fax

If you wish, you may fax your Form SS-4 to:

(855) 641-6935

In this case, it will take 4 business days to process the application.

Online 

If you are in a hurry, applying online is your best option. You can use it to get your EIN in Arkansas as soon as you fill out the form. 

Please, note that digital requests are accepted from 7 a.m. to 10 p.m. EST, Monday through Friday. You’ll also need a valid Social Security number.

Mail

Although this method only allows you to receive your EIN in 4 weeks, it may be of interest to those who value paper documents. Download Form SS-4 to your computer, fill it out, and print it, then mail it to:

Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999

Choose an LLC Registered Agent

To file an LLC, you need to choose and appoint a registered agent. It is a representative who will take care of receiving all official company correspondence. This is an indispensable step in starting an Arkansas LLC, as it ensures that the state can contact the business quickly.

The owner has the right to appoint an individual or a legal entity as a registered agent in Arkansas.

Registered Agent Services

Do you want your LLC documents to be in perfect condition at all times? Then take the opportunity to hire Best Registered Agent Services

A professional online company like Rocket Lawyer or IncFile will provide high-quality service and give you access to a wide range of different additional features. You’ll always be up-to-date on the business and, at the same time, be able to easily go on vacation or business trips.

Individual as an Arkansas Registered Agent

To save money, business owners sometimes take on the duties of a registered agent or appoint a relative or acquaintance to fill the role. Another common option is an accountant or attorney. Any of these candidates are considered to be suitable, as long as they are 18, have a physical address in the state, and can be in the company office during regular business hours.

Prepare and File the Articles of Organization

To formally open an LLC in Arkansas, you have to file Articles of Organization with the Secretary of State. These are the basic Arkansas LLC formation documents. Once these documents are approved, the business is considered to be established.

Generally, for the LLC application form, you will need to fill out some basic information, such as:

  • The name of the LLC;
  • The address of the business;
  • Who will manage the LLC;
  • The name and physical address of the registered agent;
  • Signatures and printed names of those forming the LLC.

You can file Arkansas LLC Articles of Organization online, by mail, or in person. The LLC fee depends on the delivery option.

Online

Use Online Filing if you want your Articles of Organization to be processed on the same business day. Select “Articles of Organization” from the list and click “Start Form”, then follow the instructions.

There is a mandatory processing fee of $45.

By Mail/In Person

You can also download the application form to your computer, fill it out, and print it. Please, enclose a check for $50 and mail it to:

Arkansas Secretary of State
Business and Commercial Services Division
Suite 250, Victory Building
1401 West Capitol Avenue
Little Rock, AR 72201

Usually, paper documents are processed within 2 business days. However, for personal delivery, the wait time can be much shorter.

Create an LLC Operating Agreement

An Operating Agreement is an internal LLC legal document that serves as a guideline in different situations. It contains the basic principles and procedures of the company and describes its management structure. 

It is not obligatory to have an Operating Agreement in Arkansas. You can easily set up an LLC without taking the time and effort to prepare this document. However, experienced entrepreneurs and experts unanimously advise drawing up an Operating Agreement because it offers advantages such as:

  • The opportunity to avoid default rules, which, due to their general nature, take little account of an individual company’s interests;
  • Acceleration and improvement of the company’s efficiency;
  • Avoidance of managerial conflicts;
  • Securing the separation of participants’ personal funds from the company’s assets, etc.

Although there is no universal form for operating agreement LLC in Arkansas, most often it regulates the following points:

  • Management;
  • Members and their contribution;
  • The way profits and losses will be divided;
  • Procedure for admitting new members, as well as outgoing members;
  • Indemnification and liability clauses;
  • Voting procedures;
  • Amendments to the Operating Agreement;
  • Dissolution procedure, etc.

Because every business is unique, the structure and content of the Operating Agreement are completely determined by the owner. Even without experience or legal training, you can create this document using free online templates. Most of them are of quite good quality, but templates available from online companies like LegalZoom are more preferable. 

Alternatively, you can contact a business attorney for writing or reviewing an already prepared Operating Agreement. Of course, the services of a professional will cost more than working with a website, but you will get a high-quality, detailed document.

Open a Bank Account for an LLC

When you register your LLC and get EIN, you need to ensure that its assets are separated from the personal funds of its members. This is an important prerequisite to keep limited liability in effect. The best way to do this is to have a separate commercial bank account.

In most cases, the following documentation is needed to open an Arkansas LLC bank account:

  • A copy of the Arkansas LLC Articles of Organization;
  • EIN in Arkansas;
  • The operating agreement.

Keep an LLC In Compliance With the Legal Requirements

LLC Taxes

Federal Taxes

By default, it is not necessary to file a separate tax return for an LLC at the federal level. Instead, all business income and expenses are reported on the owners’ personal 1040 tax returns and/or Schedule C.

Optionally, participants may apply for a change of tax treatment to corporate taxation.

State Taxes

As it is at the federal level, LLC tax filing in Arkansas involves “pass-through” taxation. Instead of LLC tax forms, owners file personal tax returns.

This state also has a combined Annual LLC Franchise Tax Report, which includes a franchise fee and an annual report. The cost of processing this business tax form for LLC is $150. It should be filed annually, no later than May 1.

Depending on your preference, you can file your Annual Franchise Tax Report online or send a hard copy to:

Arkansas Secretary of State
Business and Commercial Services Division
P.O. Box 8014
Little Rock, Arkansas 72203

If you miss the reporting deadline, the state will require the LLC to pay a $25 fine.

Additional Taxes

In addition to the Arkansas LLC taxes listed above, there are some other taxes you should be aware of. For example, sales of goods or services are subject to pay Sales and Use Tax. Another common type of tax is Withholding and Unemployment Insurance Taxes, which are mandatory for companies with employees.

In addition, some cities and counties may impose their own tax requirements on LLCs whose offices are located in their territory.

If you are not sure which taxes your company must pay, you can check the Tax Guide for New Arkansas Businesses for more information.

Licensing for an LLC

If you want to get an LLC for business, you should not only register with the state, but you also need to take care of the necessary licenses and permits. 

There are several factors that influence how many and what kind of licenses you will need. First of all, it is influenced by the location of the business and its peculiarities. If you don’t know what licenses and permits you will need, visit Arkansas.gov. This website has a lot of useful information about LLC licensing in Arkansas, taxation, and other topics.

Also, licenses and permits exist at the county or city level. Contact your local clerk for more information about availability, quantity, and LLC business license costs.

Need Help Setting Up an Arkansas LLC?

Now, after we’ve covered the process of creating an Arkansas LLC, you can certainly handle it on your own. However, if you are too busy or don’t like paperwork, consider hiring an LLC formation service like ZenBusiness or Northwest Registered Agent. Today, the market of online LLC formation services is overflowing with offers. Dozens of companies offer LLC foundation help at various prices starting at $0. To save you time, we’ve compiled a list of the best LLC services. Each of them can help you start doing business in Arkansas quickly and easily.

Senior Business Tax Writer, etc
Jean Wilson Murray
https://bestllcservices.co/
(323) 789-5289
Senior Business Tax Writer, etc
Jean Wilson Murray

In this IncFile vs ZenBusiness review, we're going to compare two of the most popular LLC formation services based on pricing, features, and drawing out differences and similarities to let you see which is most suitable for you and your business.

You can learn more about @Mike here.

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